Inside trader Hartman faces long wait in jail

Convicted inside trader
John Hartman
will spend another four months behind bars before he has a chance to persuade an appeal court he should be out of jail sooner.

The 25-year-old former Orion Asset Management equities dealer was sentenced to 4½ years in prison in December by the NSW Supreme Court – the longest jail term yet for such an offence. He has a non-parole period of three years.

Hartman, who grew up on Sydney’s north shore and attended a prestigious private school, pleaded guilty to 19 charges of insider trading and six charges of “tipping".

He is appealing against the sentence, but the case will not be heard until November. That makes a judgement before next year unlikely.

The NSW Court of Criminal Appeal heard yesterday that the matter was a “significant and important case".

“It is a complex sentence with multiple offences," the prosecution said.

The young banker made headlines last year after judge Peter McClellan handed down a scathing judgement and criticised the financial services industry.

“Paying $350,000 to a recent graduate of 21 years of age carrying out a task of modest responsibility underlines the extent to which the values which underpin our society can be compromised," Justice McClellan said.

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He questioned whether a young and inexperienced person should have been placed in a position in which “the temptations are so great and the potential rewards so significant that the fall into criminality of individuals is a significant risk".

Orion and others in the financial markets industry “have a responsibility to ensure that investors can rely on the integrity of the dealers in the market", he said.

The Hartman case is not unique.

Of the 11 insider trading prosecutions brought by the Australian Securities and Investments Commission over the past 18 months, many have involved employees of investment banks or advisory firms.

A former senior manager at accounting firm KPMG, Andrew Dalzell, was sentenced earlier this year to a two-year intensive correction order,to be served from home.